My Book, “The Great Disruption”

Follow me on Twitter

The World After Copenhagen – A Return to the Rational?

Standard

Throughout my 35 years in sustainability it has always seemed odd that while so-called economic rationalism reigned over our political, economic and business worlds, rational thought wasn’t applied to issues like climate change. The risks were always clear, as defined by rational science, while a logical analysis of the economics showed acting early was cheaper than acting late. Yet a strange kind of religious and ideological zealotry took hold, as otherwise sensible, educated people ignored rational thought. It was a failure of reason.

While Copenhagen failed to deliver any agreement however, it may well mark a return to rational thought and with it some profound shifts in markets, politics and our approach to sustainability. Perhaps historians will mark this point and refer to the world BC and AC – Before Copenhagen and After Copenhagen.

What will historians say changed at the end of 2009? And if we could read their conclusions now, would it change our present responses – not as historians but as the creators of that history? Perhaps they will write something like this:

The old world ended at Copenhagen. It was the moment a critical mass of people came to accept that the old way of doing things was finished. They started to prepare for a new world, and for the shift to the war footing that would deliver it.

While Copenhagen failed to deliver action on reducing emissions, it delivered a very clear outcome. It shattered assumptions that had previously framed the debate and so provided an historic shift in the approach to the issue.

For a start it was the end of the debate about the science. Copenhagen marked the victory of reason over ideological and religious zealotry.

The debates continued on the detail and that was of course a healthy part of the process. There is always uncertainty in science and such debates test the strength of assumptions. But After Copenhagen there was a critical mass of powerful and influential people who accepted that despite the uncertainties, it was time to act. They kept debating 1 vs 2 degrees of warming and levels of CO2 at 350 vs 450ppm but they stopped debating the rules of physics and chemistry. They knew if you increase the thickness of the atmosphere’s blanket the world gets warmer. While many remained frustrated at the lack of action despite this acceptance, this was a critical turning point because the mathematics of what accepting the science meant for the economy were profound.

It was also the end of any chance of a measured and careful transition. That moment probably passed in 2000 but it was firmly dead and buried with the lack of an agreement in 2009. With actual emissions reduction now years away, the lags in the climate system dictated that a crisis driven, war like response was now inevitable, even with the high 2 degree target. As a result, assumptions about the pace of change and the process by which it would be delivered were finished. It was clear After Copenhagen that when the change came, the pace would be rapid, the process chaotic and the transformation radical.

This meant the level of national economic and company business risk posed by delay was now much greater than the risk posed by the change itself. As a result, business came on board at Copenhagen, now seriously worried that delay would lead to such rapid change, their companies faced catastrophic commercial risk.

Perhaps the shift of greatest historical significance was that it was now clear the pursuit of global consensus was an illusion. The major powers had played along with the UN process because the complexity of reaching consensus gave them an excuse to avoid action. They could profess support for a global deal, knowing it wouldn’t happen. But once there was a danger of it becoming real, they dropped that idea like a hot potato. There was nothing in history to suggest they were ever going to let large numbers of small, poor countries help determine the rules. As history shows, those with power don’t give it up lightly.

Instead they started the process of forming what was to become the Coalition of the Cooling, a group of powerful nations and their friends who had sufficient economic and political muscle to define the inevitable economic transition. If power was going to shift away from the sole superpower, it was in the interests of both the US and the group of large emerging powers to form a new club to guide the future. With the addition of their various allies, the future could then be negotiated with 10 people in the room. China had arrived.

What those in power missed until much later though was the strength of public concern and as a result the rising influence of civil society. Tens of thousands of advocates had gone to Copenhagen, assuming their intellectual and political contribution would help leaders get the right outcome. They left angry at the failure of world leaders but determined to force change from the bottom up.

The combination of civil society, particularly the youth movement, along with the simple mathematics of climate science, led to what most investors missed completely until it was too late.

After Copenhagen, coal was finished.

It was surprising so many missed this because the data was clear for all to see. Investment in clean energy outstripped investments in fossil fuel energy every year from 2008 on. More importantly, once 2 degrees was accepted as the maximum target, it was all over for coal. There just wasn’t any room in the remaining carbon budget for coal to keep growing. So once the world’s powers decided the science was in, coal was out.

This was the case anyway and would have unfolded over the decades to come, but when civil society decided to give up on the direct political process and focus all of its attention on coal, sentiment shifted quite rapidly.

It was of course technically illogical to focus just on coal, after all it was only 20% of global greenhouse gas emissions. But it was already clear the market would kill off oil, with electric cars and / or peak oil. All the alternative NGO campaign targets were too complex and missed the key ingredients : a powerful enemy that can be demonized, a simple NO campaign and definable physical targets to focus on. The movement had learnt the dangers of diffusion by putting so much into Copenhagen for so little tangible result.

So the group with nothing to lose, the Angry Islanders joined with the youth driven movement Our Climate Our Time and directed its powerful emotional message entirely onto coal.

Campaigns erupted everywhere – targeting every coal mine, every coal company and every coal train and ship. It was a market smart campaign with investors targeted as owners, banks as lenders and coal executives as climate criminals. It took a few years to build momentum but once the US and China jointly announced a ban on new coal plants, the house of cards came tumbling down. The valuation of coal companies collapsed, under the combined weight of public disdain, regulatory threat and shrinking market, with alternative technologies now competing on price. With investors running scared having seen their coal investments drop 75% in value over a month of carnage, the industry went into terminal decline, confined to the margins thereafter.

The litigation against directors and fund managers however, carried on for a decade more. Regulators took action against directors who hadn’t explained the key risks to investors. Shareholders asked why these risks weren’t obvious to directors given the science and why they were misled about the commercial potential of CCS.

So back to the present as we head into 2010.

Who knows how the future will actually unfold, but some parts of the above are clear. The focus on Copenhagen failed to deliver for the global climate movement. It was always going to, as I argued in my last column, but even I didn’t think it would fail quite so spectacularly. So a shift in focus is inevitable for climate campaigners. We don’t know where it will shift to, but we’ll find out in 2010.

The business community are the biggest losers from Copenhagen. Despite their really serious focus and coordinated calls for action leading up to Copenhagen, they now face heightened risk of discontinuous change. The lack of a regulatory result, combined with the political acceptance of the need for even stronger action than before, creates a huge gulf between present reality and the inevitable future. That gap will close at some point and do so suddenly. For companies determining their business strategies this poses massive risk. It makes the coal scenario painted above far from fanciful. Markets are driven by sentiment and sudden sentiment shifts are now inevitable. The challenge is working out where and when they will strike. I’d certainly be nervous if I was a coal executive or investor.

For policy makers it’s back to the drawing board. With no genuine global agreement anytime soon, perhaps they will abandon trading schemes and revert to the much simpler approach of national carbon taxes and bilateral deals, following the trade model. Meanwhile all but the lowest carbon economies now face ever increasing risk from delay. When the global market shift gets momentum, being stranded with high per capita carbon emissions could be competitive disaster for nations that are slow to act.

On personal level, part of the challenge is dealing with despair and frustration. Community activists, corporate leaders, policy makers and scientists have put so much effort into action on climate change, for little result. Sure we’ve seen great progress in understanding and have many new allies on board but negligible action to even delay the now inevitable crisis. The climate responds to emissions not to political accords.

So take a moment to grieve for the lost opportunity, shed a tear like Bill McKibben did and say thanks to all those who have thrown their all at it.

We have led the horse to water but it’s not yet thirsty enough to drink.

But don’t stay there. We don’t have time for despair. We now have to move on to the new world, the one After Copenhagen. So after some Christmas rest and reflection, decide what you’re going to do and get back to work. We have a civilisation to save.

15 thoughts on “The World After Copenhagen – A Return to the Rational?”

Those are the best six words I’ve ever seen written on an energy/enviromental site.

Fending off the depression and disappointment is indeed a challenge. I will soon be visiting my three nieces, the ones I’m most directly fighting for re:climate chaos, and I expect them to reset my perspective, as they always do without knowing it, so I can come back post-holiday and charge up the mountain again.

I suspect that post-Copenhagen we’ll muddle through for a while as the international community assesses what did and didn’t happen and then concocts various new ways to attack the problem.

As I often say on my own site, the future will be a lot of things, but “dull” isn’t on the list.

Damn! You have been busy mate :-) . I love the ‘war plan’ plugs too :-)

Hmmm! Thirsty Horse…it might be ok if we could just shoot it and compost it…but that wouldn’t work cause it’s probably too full of preservatives (like us)…probably end-up with a Climate Change resistant, un-dead horse wandering around annoying people more than it does now…if that’s possible?

I’m with Paul Hawken ( http://www.natcap.org/sitepages/pid10.php ) – It’s like a great big epic movie. Act 1 and the scene is set (Insert Industrial Revolution and our beloved Economic Rationalism here). Act 2 sees the proliferation of mutant zombies in Gucci Suits & Ties and the stalwart underdogs erupting from where they always erupt…the grass roots. Wouldn’t it be great if some of these Grass Roots Movements actually grew into grass and fed a herd of attack-trained elephants? :-) The 2nd Act closes with the ‘Super Friends’ wimping-out and buggering off into their nuclear-powered underground resorts with a tattered remnant of the world’s last hope getting blown out the window into the smog filled sky…INTERMISSION.

Whoa! What will happen in the 3rd Act? It’s a cliff hangar…it’s got more suspense than you can poke a Chimney Stack at. If there are any planets out there that have survived Reality TV for long enough to build spaceships, they’d do well to get their camera crews over here quick…if this isn’t an epic movie with a toxic mix of reality concocted on a few decades of bullshit, I don’t know what is? :-) This has got everything! :-) Wouldn’t miss it for quids…shame I can’t afford Popcorn though :-P

It’s a great post Paul…I just wish more people could hear and see…but oh well, you get that on the big jobs…it’s not like it’s the first planet we’ve wrecked; Get your Infinite Universe T-Shirts here!…Stocktake Sale on Reincarnational Life Insurance Policies, get ‘em while their in writing (& you can still read)….Oh! And would like fries with that? :-)

Have a great Christmas mate and thanks for at least adding some genuine thought and meaning to this otherwise embarrassing story :-)

Thanks for the useful thought process. It is well informed by observing past human efforts. A good one-liner for all economics is:- How bad do people let it get before they change to fix it ? and how good does it get before someone stuffs it up again”. The peak or leading edge of human intelligence is the ability to think and to act rationally for a long term outcome against the strong pull of an immediate emotional reaction. We have to recognise that, be amazed at the level of common understanding already, and realise as you say that some point will be reached where the lethargy of society as a whole snaps into highly energised action. In such a scenario one is wise to “keep some powder dry”, help where you can but don’t burn out pushing an immoveable object but get ready. The list of really useful things one can do regardless of “what happens” is large. Live light and cheap. Learn really useful stuff. Do local things. These things save money, save energy and build community anyway, whether thay save the world or not. They also make you less vulnerable to change. The list of obvious things to NOT do is equally large. Do not invest long term in things that are part of the problem.. Don’t buy a bigger vehicle, or take up golf, or set up a life depending on a lot of air travel.
Interesting idea about suing pension funds etc for investing heavily in coal at long term prices when the writing was on the wall. Of course if each super or pension fund at least offers a strong “responsible” investment strategy choice that recognises carbon risk and seeks sustainable investments then they can say to members “we gave you the choice”.

Let’s hope that paul’s brilliant wording (BC and AC, coalition of the cooling, etc..) will convince some of our leaders to choose the right path toward a low carbon society.
We will have to find some efficient tricks or psychological approach to wake up our citizen and propose a volontary way for reducing sharply our carbon emissions.

Paul, have enjoyed your writings this year immensely…have done since you wrote a few times for the Conservation Gazette back in 1995….great perspective
I took my kids to the Bali COP partly to combine work with a holiday and partly so they could be exposed to what I do and to see what happens in the wonderful world of sustainable development. My son Oscar was 10 and took a lot in and for primary school kid has followed events really closely. We “debriefed” on Copenhagen and his main reflection was to work out what year it would be when he is my age. The answer is 2041. I was reminded about how much into the future this will play out. And how there are young kids interested in this issue that will grow up with a very different mindset. It doesnt diminish the responsibility we have to influence, lead, motivate and guide now, but it is a historical point in time and there will be a evolutionary generational zeitgeist.
As a post script, Oscar started reading Brave New World tonight. Time to imagine the future.
Cheers

I liked your argument that big business is the big loser (apart from the planet of course). But I wish I could share your optimism Paul. Whilst it was clear COP15 was never going to deliver an agreement it wasn’t clear how far backwards it would move us all. Do we really see political leadership post-Copenhagen getting more ambitious? Not for some time I suspect. Meaning we are in for a long period of going backward on any deal / coalition of the cooling / bold initiatives etc.
Have a good Xmas

Clearly it would be effective if the coal companies were to become pariahs to the public. But just as we like to demonise supermarkets for their commercial power, it is us, the consumers, who are the real demons. We don’t seem capable of making purchasing choices that are based on the whole picture. We always chase the cheapest or apparent best value or the most comfortable. We are able to do this because the full costs are not exposed to us. Politically it is probably impossible to perceive a government which applies environment taxes so the full cost hits our hip pockets.

Living in Queensland I read that our population has increased 30 % over a period. In the same period our power consumption has increased 90% in the same period – witness houses designed for southern, cooler climes now made comfortable by air-conditioners. Where is the public uprising to demonise the air conditioner buyers? Where is the publicity campaign and government incentive to force the use of ceiling fans and well-ventilated house designs, as an example?

The Earth cannot sustain our greedy living. As consumers we just don’t get it!

Your words Paul are a truly stimulating take on what can only be described as a miserable and darkly ominous outcome at Copenhagen. Many of us need your type of positive shake-up and on an ever regular schedule to avoid sliding into the apparent apathetic malaise. As you intimated last time the outcome at Copenhagen was hardly unexpected. After all when how often before has the entire planet agreed and embarked on any sort of positive civilisation saving plan? Banning CFCs…. the formation of the UN maybe.
As I see it the problem of climate change is clouded by its very complexity and our ability to irrefutably identify the anthropogenic nature of what is occurring with the even the most sophisticated tools at our disposal. Also it is not often seen as an immediate threat like 9/11, H1N1 or Pearl Harbour. Many of us will not be around when climate change really starts to bight.
These factors in turn I feel has led to the polarisation of opinions both within the scientific community and lay persons alike. And I feel sure that if ever we do get to that point in time where, like CFCs and the ozone layer we have universal consensus and in sufficient strength to silence the ubiquitous climate change sceptics, deniers and mere gadflies, it is likely to be far too late to take any affirmative action.

So please keep up the good work Paul. You have a devoted follower in me

As we contemplate what happened at COP15 I think we could do well to ponder Thomas Kuhn and his thoughts about the dynamics of scientific paradigm shifts. He suggests, if you recall, that these shifts are discontinuous and never come from adding bits at the edges of the existing paradigm (my paraphrasing). Kuhn proposed that the new paradigm emerges when the evidence accumulates and shows that the old paradigm is not meeting our needs. And as you indicate – this condition is being met. The second condition he suggests is the new way (paradigm) being described by others, who are able to make this conceptual leap, so those who have not yet made the conceptual leap, can ‘see’ what it will be like.

What I love most about your post Paul, is that it starts to create a vision of the future. More accurately, you envision a transition to the new paradigm. I suggest that we need more visioning – lots of it by many people (in local communities if at all possible)! The visioning will provide something people can move towards and allow a ‘letting go’ of the old paradigm.

Maybe what we hoped for at COP15 was a solution that was really a fiddling at the edges of the old paradigm – a quick fix. And so was doomed anyway – it was never the ‘real deal’. Maybe what may emerge now (and would have emerged at some point anyway, because it has to), in the chaos of adaption at the edges different systems (and nations) as you describe it, is the real paradigm shift.

We have a belief that change should be planned and orderly, but my understanding from the organisational world, is that real, successful and sustainable change, is in fact, emergent and chaotic – even if people make it sound like it was a planned path after the event.

So let’s get used to working with people’s passion and enthusiasm at the grass roots (this is where the real energy is); let’s get used to the idea that the future is unpredictable over time and geographical space; let’s get used to ‘not knowing’ the entire pathway to the new future; and let’s all get used to taking some personal responsibility for our collective future.

Many thanks to you Paul – hope you have a great break and return in 2010 as vibrant as ever!

If the current regime in China are resolved to fight the very notion of verifiable targets then the urgent challenge of the next decade is how we bring the Chinese inside the tent .

As a major exporter of coal, Australia has a huge moral obligation to start exerting diplomatic and commercial pressure. Coal investors will only start getting nervous when China stops buying or Australia refuses to keep supplying the stuff.